Advanced KPIs: The Boyd Group

July 7, 2015
This week, rather than just reviewing financial statements, we are going to complete a bit of financial analysis to derive certain KPIs that tell us about how Boyd operates.
Over the past few weeks we have taken an in-depth look at the Boyd Group Income Fund (Boyd) income statement, cash flow statement, and balance sheet. The purpose of this was to understand how a large MSO uses corporate finance to drive growth and to also explain how a company that reports a net loss in the millions of dollars actually generates millions of dollars of cash for shareholders (or, in Boyd’s case, the “unitholders”). We also discussed how Boyd is leveraging scale to drive increased profitability and sales growth.

This week, rather than just reviewing the financial statements as they are, we are going to complete a bit of financial analysis to derive certain KPIs that tell us more about how Boyd operates.  I will keep the analysis straightforward – no derivative equations I promise! Just simple addition and subtraction with a sprinkle of division thrown in at times for good measure. We will use all of the statements to develop a high level understanding of how Boyd integrates operations and finance. We will also compare these financial KPIs to other industry KPIs so that you can compare your operations to that of a large MSO.

While I have written at length about the financial factors driving consolidation, the stark reality is that the large consolidators continue to grow because they are good operators that execute their business model effectively.  The managers running these companies are professionals and generate sizeable financial returns for unitholders while also providing value to their customers. Whether you are a single-location business or a growing MSO, there is much to learn, both financially as well as operationally, from large consolidators.

The collision industry is full of metrics and KPIs. The KPIs I will discuss below are similar yet slightly different than many of the more common KPIs in the industry. They are what some equity analysts working on Wall Street would use to evaluate Boyd’s operational performance, as well as to project the future financial performance of the company. Bottom line, these are KPIs that are important for businesses of all sizes to evaluate regularly (for additional details and spreadsheets that calculate these ratios please email me on my contact page.)

Read more here.